If you’ve glanced at HMRC’s penalties list lately, you’ll know it’s not pretty reading. Time after time, estate and letting agents are topping the charts when it comes to Anti-Money Laundering (AML) fines.
From missed registrations to half-baked policies and forgotten checks, the property sector is under more pressure than ever. In fact, in HMRC’s most recent data for 2024–2025, 66 out of 116 fines (around 57 percent) were handed to estate and letting agents. Penalties ranged from £1,050 to £52,000, with the average fine sitting at about £6,200.
That’s a lot of businesses losing money unnecessarily. So why is our industry being hit so hard, and what can you do to avoid being next? Let’s dig in.
Why Estate Agents Keep Getting It Wrong
Estate agents face a unique set of challenges when it comes to AML. Here’s what I see most often when working with clients:
High volume and pressure
When the phones are ringing off the hook and completions are flying in, compliance slips down the list. But the truth is, ignoring AML never ends well.
💡 Flex Tip: Treat AML like you treat viewings. If it’s not booked in your diary, it won’t get done. Block out time for compliance admin every week.
Complex and ever-changing rules
The regulations evolve constantly. Even the most experienced agents can struggle to keep up.
💡 Flex Tip: Sign up for HMRC updates or industry newsletters. That way, changes land in your inbox before they land as a fine.
Weak or generic risk assessments
Too many firms still rely on old, copy-paste documents that don’t reflect their actual business model or risks.
Insufficient staff training
If your team isn’t confident spotting red flags, things get missed and HMRC will notice.
💡 Flex Tip: Training doesn’t have to be dull. Quick, practical refreshers in team meetings can be more effective than a once-a-year slideshow.
Confusion over technology
There’s no shortage of AML tools, but which ones really tick the compliance box? The uncertainty makes some agents put it off altogether.
💡 Flex Tip: Don’t wait for the “perfect” tool. Choose a trusted provider and keep a note of why you picked it. HMRC cares about your reasoning as much as the system itself.
Misconceptions about risk
I often hear “AML doesn’t apply to us, we don’t hold client money.” Sadly, that’s a myth. If you’re doing estate agency work, you’re in scope.
Failure to register
The most common (and most frustrating) reason for fines is also the simplest, not registering with HMRC, or forgetting to renew on time!
Case Study Snapshot: The Numbers
Looking at the latest HMRC penalties (Jan 2024 – Mar 2025), here’s the picture:
- 66 estate and letting agents fined out of 116 cases
- That’s 57 percent of all AML penalties across regulated sectors
- Average fine for agents: around £6,200
- Fines ranged from £1,050 right up to £52,000
- Most breaches were simply for failing to register with HMRC
It’s clear estate agents are still firmly in HMRC’s sights, and most of these fines could have been avoided with some basic steps.
The May 2025 Law Change. Were You Ready?
This year brought one of the biggest shifts we’ve seen in a while. Since May 2025, it’s now a legal requirement for every letting and estate agent to carry out sanctions checks on all clients.
If you missed that announcement, don’t worry you’re not alone. Many agents I’ve spoken to over the summer hadn’t even heard of the change, let alone updated their processes. But the reality is that HMRC will expect to see these checks happening as standard.
💡 Flex Tip: If you haven’t built sanctions screening into your onboarding yet, make it your number-one priority this month.
Want the full breakdown of what changed and what it means for you? Have a look here: New Legal Requirement – Sanctions Checks Now Mandatory (May 2025 Update)
What HMRC Looks for in an Audit
If HMRC walked into your office tomorrow, they would want to see:
- A proper business-wide AML risk assessment
- Clear, up-to-date policies and procedures
- Evidence of CDD and EDD (ID, proof of address, source of funds)
- Sanctions and PEP screening records
- Training logs for all staff, with refreshers recorded
- Records kept securely for at least five years
💡 Flex Tip: Run a mock audit once a year. Pretend HMRC is coming tomorrow and check what you can actually show them.
The Human Side of AML
It’s easy to see AML as paperwork, but really it’s about people.
- Protecting communities from money laundering linked to crime or terrorism
- Protecting your clients from being caught up in something illegal without realising
- Protecting your own reputation and the future of your business
When you frame it that way, compliance feels less like red tape and more like doing the right thing.
Five Practical Steps to Stay Compliant
Here are five straightforward actions you can take right now:
- Set aside time each week or month to review your AML files
- Use a reliable ID verification and sanctions screening tool
- Keep your team trained and confident
- Record every check and every decision
- Book in an independent review to spot gaps before HMRC does
The Flex AML Compliance Checklist
Take a minute to see how you measure up:
- Registered and renewed with HMRC on time
- Tailored business-wide AML risk assessment in place
- Policies and procedures updated for the May 2025 sanctions rule
- CDD, EDD and sanctions screening carried out for every client
- Staff training completed and logged
- Clear evidence of source of funds checks
💡 Flex Tip: If you can’t tick every box, you’ve already found the areas to work on first.
Myth Busting: Common Misunderstandings
- AML only applies if you handle client money. Not true, estate agency work is in scope regardless.
- HMRC audits are rare. In fact, estate agents consistently top the fines list.
- A template policy will do. Regulators want to see documents that are specific to your business.
What’s Next for the Sector
With sanctions checks now mandatory and regulators under pressure to show results, the direction is clear. Enforcement is only going to get tougher, expect to see more focus on:
- Digital ID verification and open banking solutions
- Greater scrutiny of overseas buyers and beneficial ownership
- Regular staff training, not one-off sessions
- More public enforcement to deter others
💡 Flex Tip: Build AML reviews into your annual business plan so changes never catch you off guard.
Final Thoughts
AML compliance doesn’t need to be complicated. With the right support and simple, practical systems, you can stay compliant, protect your clients, and safeguard your reputation. Prevention will always cost less than a fine and it shows your customers that you take their trust seriously.
If you’d like a head start, I’ve put together free resources and templates designed specifically for estate and letting agents. You can explore them here: Flex AML Guides & Resources
And if you’d like a friendly, no-obligation chat about your current setup, I offer free thirty-minute consultations to help you spot risks and build a plan that works in practice.
Let’s get you audit ready and keep it that way!
Frequently Asked Questions About AML & Estate Agents
Do estate agents really need to do AML checks?
Yes! Under the UK Money Laundering Regulations 2017, all estate and letting agents must carry out Customer Due Diligence (CDD) checks on buyers and sellers. This applies even if you never hold client money. The property sector is classed as high risk for money laundering, so AML checks are mandatory.
What are the most common AML breaches for estate agents?
The most frequent issues HMRC fines estate agents for are:
- Failing to register (or renew) with HMRC for AML supervision
- Incomplete or missing business risk assessments
- Poor record-keeping of CDD/EDD
- Lack of staff AML training
- Not carrying out sanctions checks (mandatory since May 2025)
How much are AML fines for estate agents?
Penalties vary widely. HMRC has fined estate agents anywhere between £1,200 and £52,000. In the most recent round of fines, estate and lettings agents accounted for over 57% of all penalties issued across regulated sectors.
How can estate agents avoid AML fines?
The easiest way to stay compliant is to:
- Register and renew with HMRC on time
- Keep a written AML risk assessment up to date
- Implement tailored policies, controls, and procedures
- Train your staff regularly and keep training records
- Carry out proper CDD/EDD and sanctions checks
- Maintain a clear audit trail of all decisions and checks
For more tools and resources, visit 👉 Flex AML Guides.
Flex AML 